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16 Cards in this Set
- Front
- Back
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Entry to record credit sales (Bad Debts)
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Dr.--- Bad Debt Expense
Cr.--- Credit Sales |
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Entry to record bad debt for a period
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Cr.--- Bad Debt Expense
Dr.--- Allowance for doubtful accounts |
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Direct Write off entry (deemed uncollectible)
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Dr.--- Allowance for doubtful accounts
Cr.--- A/R |
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Record recovery of debts previously written off (TWO ENTRIES)
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Dr.--- A/R
Cr.--- Allowance for doubtful accounts Dr. Cash Cr. A/R |
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% of credit sales method for estimating bad debts
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Bad debt expense= credit sales*% deemed uncollectible
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Aging of accounts receivable method for estimating bad debts
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Endding balance for Doubtful Accounts= Total amount considered uncollectible based on aging method
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Computing Ending inventory
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Beginning Inventory + Purchases- COGS= Ending Inventory
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Inventory Turnover ratio
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Inventory Turnover ratio=
COGS/Average Inventory |
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Lower Cost or Market Value (LCM)
[if the market value is lower than the cost of the inventory, it can be written down as: |
Dr. COGS
Cr. Inventory |
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Depreciation
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depreciation is the process of cost allocation and not valuation
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Change in depreciation
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(Net BV- revised residual value)/revised useful life
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Impairment=
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Impairment= BV- fair market value
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Define Life Tangible
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Must be amortized
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Indefine Life Tangible
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Must NOT be amortized
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Gain/Loss on sale
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=sales price-netbook value of asset
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Receivable Turnover
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= Net receivable sales/ Average net receivables
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